Silver Price Forecast: XAG/USD eases around $29.50 ahead of Jackson Hole Symposium

LONDON (August 22) Silver price (XAG/USD) price edges lower to near $29.50 per troy ounce during the European hours on Thursday. Traders are focused on Federal Reserve Chair Jerome Powell's upcoming keynote speech at the Jackson Hole Annual Symposium on Friday, where he is expected to address the potential for interest rate cuts in the United States.

The downside for non-yielding Silver could be limited, as the Federal Reserve is expected to implement 100 basis points (bps) in rate cuts by the end of this year. However, there is some disagreement among market analysts on whether the Fed will opt for a 25 or 50 bps cut at its September meeting. Lower interest rates would make commodity assets like Silver more attractive to investors, as they may offer better returns in a low-rate environment.

CME FedWatch Tool suggests that the markets are now pricing in a nearly 65.5% odds of a 25 basis point (bps) Fed rate cut in its September meeting, down from 71.0% a day ago. The probability of a 50 basis point rate cut increased to 34.5% from 29.0% a day earlier.

FOMC Minutes for July’s policy meeting indicated that most Fed officials agreed last month that they would likely cut their benchmark interest rate at the upcoming meeting in September as long as inflation continued to cool.

The safe-haven Silver could find support amid the ongoing deadlock in securing a truce agreement between Israel and Hamas, which raises the risk of a broader conflict in the Middle East. On Wednesday, US President Joe Biden urged Israeli Prime Minister Benjamin Netanyahu to prioritize achieving a truce in Gaza and the release of hostages, but both Israel and Hamas remained steadfast in their demands.

Vice President Kamala Harris also joined the conversation following the reports from Palestinian health officials that Israeli airstrikes had killed at least 50 Palestinians within 24 hours, according to a Reuters report.

FXStreet